Exploring Masterworks: Is Art the Next Bold Step in Your Investment Journey?

A Quick Look at Masterworks: Art Investment for Everyone

When you think about investing, you’re likely thinking of the usual suspects: stocks and bonds, perhaps even things like private equity and real estate. But what about art? Traditionally, investing in art has been an exclusive gig for the uber-rich, but now, Masterworks is shaking things up by making fine art investment more accessible to the general public.

Masterworks, founded in 2017 in New York by contemporary art investor Scott Lynn, has a unique approach to art investment. They buy paintings that are predicted to increase in value by 9-15% annually and then sell shares to investors for $20 each.

Now, the goal is to hold onto the artwork for 3-7 years before selling to a collector. Shareholders can make an offer to purchase the piece any time, and if the majority agrees to sell, the funds get distributed to the investors after fees and costs.

Although Masterworks intends to make trading of shares available in the future, this feature isn’t available yet. So, know that your investment won’t be liquid. You’ll own it until the piece is sold.

Is Art a Worthy Investment?

You might be wondering, “Is art really a good investment?” According to the Artprice100 index, which tracks the performance of top artists, fine art has outperformed the S&P 500 since 2000 significantly. So, it appears to be a savvy investment, especially if you invest in pieces by renowned artists.

What Makes Masterworks Stand Out?

Masterworks changes the game by allowing anyone to invest in art. Notably, they prioritize blue-chip artists like Warhol, Monet, or Picasso, which boosts the potential return on investment. Also, this gives most investors a chance to diversify their portfolio with an alternative investment that’s not tied to market failures.

Despite the promising prospects, Masterworks is not without its downsides. For one, it has a lack of liquidity, meaning you shouldn’t expect to see your money for a while, considering the typical holding period is 3-7 years. Additionally, the platform charges a 1.5% annual fee and retains 20% of the profits upon painting sale.

Given this information, you might wonder if Masterworks is a good fit for you. If you’re looking to diversify with alternative investments and don’t mind waiting a few years to see results, then Masterworks might be worth considering.

A Quick Summary:

– You don’t need to be an accredited investor to work with Masterworks.
– Shares in a painting start at $20, but the total minimum investment depends on the artwork.
– Usually, an investment lasts 3-7 years.
– Masterworks charges a 1.5% yearly fee and keeps 20% of profits when the art is sold.
– Masterworks specialises in blue-chip art from well-known artists.

For more information or to start investing with Masterworks, head over to their website.